Responsibility for the
accuracy of the HIP
The Seller is
responsible for the accuracy
of the HIP unless they
appoint an estate agent at
which point the liability
for the accuracy of the HIP
passes to the estate agent.
The Seller or their agent
will not responsible for the
accuracy of information
provided by third parties
such as searches, official
copies etc. provided they
have good reason to believe
they are accurate.
The penalty
for failing to provide an
accurate HIP
The Seller,
and their selling agent, are
liable to civil action and
fixed penalty fines for
breach of the rules. The
current fine is £200.00. The
sanctions will be civil
sanctions enforced by local
Weights and Measures
authorities.
Will the HIP
need to be updated?
The
regulations stipulate that
the required searches, the
Official Copy Entries, and
time sensitive leasehold/commonhold
documents such as management
accounts must not be more
than three months old at the
First Point of Marketing.
Once the HIP
is in place it does not have
to be updated unless the
Seller takes the property
off the market and then
returns it to the market at
a later date.
Putting a
property back onto the
market
The
regulations provide that if
a property is sold subject
to contract and withdrawn
from the market the Seller
will not have to update the
HIP provided the property is
put back onto the market
within 12 months of the sale
falling through.
If the Seller
withdraws the property from
the market for any reason
and then puts the property
back on the market within 12
months he does not have to
update the HIP.
If the Seller
withdraws the property from
the market for any reason
and puts the property back
on the market after the 12
month period they may have to
pay to have the HIP updated
if the required documents
are out of date.
Provisions
for missing or unobtainable
documents
The
regulations contain
provisions to allow a
property to be marketed if
certain required documents
are missing or
unobtainable. The seller
should seek advice from a
qualified property lawyer
before marketing a property
without the required
documents.
Currently the
regulations allow the
Seller to market the
property without a HIP
provided he can prove
that one has been
ordered.
Paying for
the HIP
The owner of
the property is liable to
pay for the cost of the HIP.
The Seller will be obliged
to order the HIP and ensure
it is in place before
marketing the property. Many
companies will be offering
deferred payment schemes
allowing the Seller to pay
on legal completion.
Cost of the
HIP
It is
currently estimated that the
average HIP will cost in the
region of £250 - £400
without a Home Condition
Report depending on the cost
of the searches and whether
the property is freehold or
leasehold (leasehold fees
are higher as more documents
are needed).
Will the HIP
law be retrospective?
The
requirement to provide a HIP
will not be retrospective;
therefore if a property has
been placed on the market
before the 1st
August 2007, the Seller will
not be legally obliged to
provide the HIP. However,
there is a cut off date of 31st
December 2007 after which
point all homes with four or
more bedrooms that have
not been sold and which
remain on the market must
have a HIP.
HIPS AND
BUYERS
After the
1st August 2007 buyers will be
entitled to request a copy
of the HIP on any property
they are interested in
buying. The Seller or their
estate agent must provide a
HIP within 14 days of demand
and must provide a paper
copy if asked to do so.
Searches have
a limited shelf life of
around 3 months and if the
searches are out of date
then it is the buyer who
must pay to have them
renewed or updated.
Most buyers
will not understand the
complex legal documents
contained in the HIP and
will need to take expert
advice from a qualified
property lawyer before
proceeding. It is very
important that buyers do not
proceed without such
qualified advice.
CMS will be
offering a HIP checking
service to buyers and
further details will be
published on this site
nearer the time.
CMS
& HIPS
CMS has
studied the emerging HIP
market very carefully and
have decided to use the HIP
service provided by their CMS panel
solicitors. We believe that
buyers and their solicitors
will feel confident in
relying upon a HIP that is
provided by a qualified
solicitor under the auspices
of the Law Society. From 1st
August 2007 CMS will be able
to offer a full HIP service
to Sellers and Buyers and
further details will be
posted on this site nearer
the time.
For further
information regarding the
Home Information Pack
regulations visit the DCLG
website at:
www.homeinformationpacks.gov.uk
